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Google boss says AI investment boom has 'elements of irrationality'

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Re: Google boss says AI investment boom has 'elements of irrationality'

#211

Post by stackskipton »

ben_w wrote: post #174
thewebguyd wrote: post #136

Earlier quoted context omitted.

> Who is going to be buying the products and services if no-one has money to throw around? The same people who are buying products and services right now. Just 10% of the US population is responsible for nearly 50% of consumption. We are just going to bifurcate even more into the haves and have-nots. Maybe that 10% now becomes responsible for 70+% of consumption and everyone else is fighting for scraps. It won't be s…

The top 10% income bracket of the US is broad enough to include basically all US software developers, isn't it? If all jobs evaporate, what does the economy look like when just based on interest and dividend payments?

Top 10% of households are 212k. Plenty of software developers don't make that but if they have a spouse with 70k job, they are in top 10%. However, many software jobs are starting to be in HCOL so they probably don't feel like they are in top 10%.

Re: Google boss says AI investment boom has 'elements of irrationality'

#212

Post by palmotea »

jitix wrote: post #164
Demiurge wrote: post #147

Earlier quoted context omitted.

> In the 60s it was possible for a man to work an ordinary job, buy a house, settle down with a wife and support two or three children. Every kind of a man, or woman? > Do people really think more technology is going to be the path to a better society? Because to me it looks like the opposite. Well, this probably why statistics exist.

Thanks for pointing out this skewed view of economic history common in North America. The short period of boom in 50s/60s US and Canada was driven by WW2 devastation everywhere else. We can see the economic crisis' in the US first in the 70s/80s with Europe and Japan rebounding, then again in 90s/00s with China and East Asia growing, and now again with the rest of the world growing (esp Latin America, India, Indonesi…

> Thanks for pointing out this skewed view of economic history common in North America....

> In short, its easier to have high standards of living in your secure isolated island when the rest of the world (including historical industrial powers) are completely decimated by war.

So, what's your point? That the plebs shouldn't expect that much comfort?

Re: Google boss says AI investment boom has 'elements of irrationality'

#213

Post by Capricorn2481 »

exasperaited wrote: post #86
pksebben wrote: post #72

Earlier quoted context omitted.

I think they already have that confirmation. When we bailed the banks out in 08 we basically said "If you're big enough that we'd be screwed without you then take whatever risks you like with impunity". That's a reduction of complexity, of course, but the core of the lesson is there. We have actually kept on with all the practices that led to the housing crash (MBS, predatory lending, Mixing investment and traditiona…

Which of these firms is too big to fail though? It all depends on whether MAGA survives as a single community. One of the few things MAGA understands correctly is that AI is a job-killer . Trump going all out to rescue OpenAI or Anthropic doesn't feel likely. Who actually needs it, as a dependency? Who can't live without it? Why bail out entities you can afford to let go to the wall (and maybe then corruptly buy out…

> One of the few things MAGA understands correctly is that AI is a job-killer

Trump (and by extension MAGA) has the worst job growth of any President in the past 50 years. I don't think that's their brand at all. They put a bunch of concessions to AI companies in the Big Beautiful Bill, and Trump is not running again. He would completely bail them out, and MAGA will believe whatever he says, and congress will follow whatever wind is blowing.

Re: Google boss says AI investment boom has 'elements of irrationality'

#215

Post by palmotea »

jitix wrote: post #204
jimbokun wrote: post #182

Earlier quoted context omitted.

> It's a shame that US didn't invest all that prosperity into social capital that could have helped create high value jobs. What does this sentence mean?

Cheaper education, free/subsidized healthcare, free/subsidized childcare, cultural norms around family support, etc. Things that let workers focus on innovation. IT workers in cheaper countries have it much easier while we have to juggle rising cost of living and cyclical layoffs here. And ever since companies started hiring workers directly and paying 30-50% (compared to 10-15% during the GCC era) the quality is alm…

>>> It's a shame that US didn't invest all that prosperity into social capital that could have helped create high value jobs.

>> What does this sentence mean?

> Cheaper education, free/subsidized healthcare, free/subsidized childcare, cultural norms around family support, etc.

Except for free/subsidized healthcare, didn't the US already have those things during the post-war boom?

Cheaper education? Public K-12 schools, the GI bill, generous state subsidies of higher education (such that you could pay for college with the money you made working a summer job).

Free/subsidized childcare, cultural norms around family support? Wages high enough to raise a family on a single income, allowing for stay-at-home moms to provide childcare.

Re: Google boss says AI investment boom has 'elements of irrationality'

#216

Post by burnte »

dylan604 wrote: post #85
burnte wrote: post #54

Earlier quoted context omitted.

Agreed, it's when. They're hoping to stave it off or maybe stretch out the pop into a correction by all hedging together with all these incestuous deals, but you can't hold back the tide. They debuted this tech way too early, promised way too much, and now the market is wary about buying AI products until more noise settles out of the system.

> They debuted this tech way too early, promised way too much, finally, some rational thought into the AI insanity. The entire 'fake it til you make it' aspect of this is ridiculous. sadly, the world we live in means that you can't build a product and hold its release until it works. you have to be first to release even if it's not working as advertised. you can keep brushing off critiques with "it's on the road map"…

> sadly, the world we live in means that you can't build a product and hold its release until it works. you have to be first to release even if it's not working as advertised.

You absolutely can and it's an extremely reliable path to success. The only thing that's changed is the amount of marketing hype thrown out by the fake-it vendors. Staying quiet and debuting a solid product is still a big win.

> I'm still amazed at the number of people that do not know that the output is still not 100% accurate.

This is the part that "scares" me. People who do not understand the tool thinking they're ACTUALLY INTELLIGENT. Not only are they not intelligent, they're not even ACTUALLY language models because few LLMs are actually trained on only language data and none work on language units (letters, words, sentences), tokens are abstractions from that. They're OUTPUT modelers. And they're absolutely not even close to being let loose unattended on important things. There are already people losing careers over AI crap like lawyers using AI to appeal sanctions because they had AI write a motion. Etc.

And I think that was ultimately the biggest unforced error of these AI companies and the ultimate reason for the coming bubble crash. They didn't temper expectations at all, the massive gap between expectation and reality is already costing companies huge amounts of money, and it's only going to get worse. Had they started saying, "these work well, but use them carefully as we increase reliability" they'd be in a much better spot.

In the past 2 years I've been involved in several projects trying to leverage AI, and all but one has failed. The most spectacular failure was Microsoft's Dragon Copilot. We piloted it with 100 doctors, after a few months we had a 20% retention rate, and by the end of a year, ONE doctor still liked it. We replaced it with another tool that WORKS, docs love it, and it was 12.6% the cost, literally a sixth the price. MS was EXTREMELY unhappy we canceled after a year, tried to throw discounts at us, but ultimately we had to say "the product does not work nearly as well as the competition."

Re: Google boss says AI investment boom has 'elements of irrationality'

#217

Post by FloorEgg »

Eisenstein wrote: post #152
FloorEgg wrote: post #146

Earlier quoted context omitted.

To me this all just looks like a big frothy chemical reaction playing out far beyond any one person's control. With that view, many things oscillate over time, including game theory patterns (average interaction intentions of win-win, win-lose, lose-lose), and integration / mitosis (unions, international treaties, civil wars),etc. So my optimistic view is that inevitably we will get more tech whether we want it or no…

When you say that this pattern plays out, can you be specific?

I don't have time to be precise, but I'll do my best to be more specific.

New system better at organizing human behavior -> increases prosperity -> more capacity for invention -> new technologies disrupt power dynamics -> greed and power-law dynamics tilt system away from broad prosperity (most powerful switch from win-win to win-lose) -> majority become unsatisfied with system -> economics break down (too much debt, not enough education, technology increasingly and disproportionately benefits wealthy) -> trust break down -> average pattern of behavior tilts towards lose-lose dynamics -> technology keeps advancing -,> new technologies disrupt old power structures -> restructuring of world-powr order at highest levels (often through conflict) -> new system established, incorporating lessons learned from the old (more fair, more inclusive) -> trust reestablished, shift back to win-win dynamics (cycle repeats)

In reality it's more messy than this. Also the geographical location of this cycle and the central power can move around. Some places may sit out one or more cycles and get stuck.

Re: Google boss says AI investment boom has 'elements of irrationality'

#218

Post by jitix »

palmotea wrote: post #215
jitix wrote: post #204

Earlier quoted context omitted.

Cheaper education, free/subsidized healthcare, free/subsidized childcare, cultural norms around family support, etc. Things that let workers focus on innovation. IT workers in cheaper countries have it much easier while we have to juggle rising cost of living and cyclical layoffs here. And ever since companies started hiring workers directly and paying 30-50% (compared to 10-15% during the GCC era) the quality is alm…

>>> It's a shame that US didn't invest all that prosperity into social capital that could have helped create high value jobs. >> What does this sentence mean? > Cheaper education, free/subsidized healthcare, free/subsidized childcare, cultural norms around family support, etc. Except for free/subsidized healthcare, didn't the US already have those things during the post-war boom? Cheaper education? Public K-12 school…

> Except for free/subsidized healthcare, didn't the US already have those things during the post-war boom?

Yes, but education system is being dismantled piece by piece at all levels. I work in edutech and our goal is to cut costs faster than revenue. Enrolments are down, students are over burdened with student loans, and new grads can't compete in the market.

Also, do you think kids going to K-12 in the US can compete with kids who go to international schools in China and India? High end schools in those countries combine the Asian grind mindset with western education standards.

> Wages high enough to raise a family on a single income, allowing for stay-at-home moms to provide childcare.

This was a special period of post war prosperity that I mentioned. It was unnatural and the world has reset back to the norm where a nuclear family needs societal/governmental support to raise kids, or need to have two 6 figure jobs. "It takes a village to raise a child" is a common western idiom based on centuries of observations. Just because there was 20-30 years of unnatural economic growth doesn't make it the global or historical norm.

Re: Google boss says AI investment boom has 'elements of irrationality'

#219

Post by nradov »

jimbokun wrote: post #196
redhed wrote: post #188

Earlier quoted context omitted.

I assume the idea is more money could've been invested into bringing the bottom rungs of American society up and created a more skilled and educated workforce in the process.

So "social capital" == "education"? The US has pushed a shit ton of money into education. I mean an unreasonable amount of it went to administrators. But the goal and the intent was certainly there.

Education is part of it. But a lot of the social capital which makes societies prosperous is separate from what we usually consider to be education. On an individual behavior level that includes things like knowing how to show up for work on time, sober, and properly dressed, and follow management instructions without arguing or taking things personally. These are skills that people in the middle and upper classes take for granted but they forget that there are a large number of fellow citizens in the economically disconnected underclass who never had a good opportunity to learn those basics. As a society we've never done a good job of lifting those people up.

Re: Google boss says AI investment boom has 'elements of irrationality'

#220

Post by astura »

cedws wrote: post #137
OptionOfT wrote: post #114

Interestingly I think if the AI succeed at the level that a lot of these CEOs hope we're not much better off either. And the sentiment that goes around is more: reduce the amount of people needed to do the same amount of work: https://www.theregister.com/2025/10/09/mckinsey_ai_monetizat... > McKinsey says, while quoting an HR executive at a Fortune 100 company griping: "All of these copilots are supposed to make work…

I don't even know what the selling point of AI is for regular people. In the 60s it was possible for a man to work an ordinary job, buy a house, settle down with a wife and support two or three children. That's completely out of the realm of reality for many young people now and the plummeting birth rates show it. The middle class have financially benefited very little from the past 20+ years of productivity gains. S…

According to the census bureau median family income in 1960 was $5,600, which is $58,946.59 in Jan 2024 dollars. It's $83,730 in 2024.

For individual males, in 1960 it was $4,100 ($43,157.33 Jan 2024 dollars) and $71,090 in 2024.

Sources:

https://www.census.gov/library/publications/1962/demo/p60-03...

https://www.census.gov/library/publications/2025/demo/p60-28...

https://data.bls.gov/cgi-bin/cpicalc.pl

The thing is, a 1960s standard of living would be totally unacceptable by almost everyone today. Single car max, no air conditioning, small house or apartment, multiple children sharing bedrooms, no cellphones, no Internet, no cable, no streaming. Local calls only. Children allowed outside by themselves.

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